Will Turbo tell me if it is better to take my charitable deductions from my IRA as a reduction in income or as an itemized deduction? Thank you Arnold [PII Removed]

[SweetieJean]

Have you already done this for 2016? Are you age 70.5 or more?

[ott17amj]

I am 76 and in 20016 about $3,800 was paid to charities from my Schwab IRA. Where will this show on my Return and will your system test it both ways?

[SweetieJean]

The system will not test it both ways. Since it was already sent directly from the RMD, you cannot choose to deduct it instead. Just enter the 1099-R when you receive it.

[VolvoGirl]

You have to decide that before you take out the distribution.  You either take a withdrawal yourself or have the IRA send it directly to the charity.  How did you pay it to the charities from Schwab?  Did Schwab send it directly to the charity or did you get it first?

[SweetieJean]

@VolvoGirl  Good Q. I had assumed (perhaps incorrectly) that it was a direct transfer to the charities.

[dmertz]

You don't *have* to claim this as a Qualified Funding Distribution in the follow-up questions to entering the Form 1099-R, but you can't claim it as both a QCD and a Schedule A deduction.  If you want to, you can report it only as a Schedule A deduction, but there is no benefit to doing so.  It's more beneficial (or at least no less beneficial) to report it as a QCD since reporting it as a QCD lowers the AGI used to determine the taxability of your Social Security benefits and the premiums you must pay to receive Medicare Part B.  It also lowers your taxable income more than would be the case if without this as a Schedule A deduction you would use the Standard Deduction.

[SweetieJean]

Retirees age 70.5+ can give up to $100,000 to charity tax-free from an IRA ,and have it count as their required minimum distribution for the year.

If you make a tax-free transfer from your IRA to charity, you can’t also deduct that money as a charitable contribution. But the tax-free transfer could give you extra benefits. You don’t need to itemize your deductions to get a tax benefit from the gift (and many people who no longer have a mortgage don’t itemize their deductions).

Making the tax-free transfer also keeps the money out of your adjusted gross income. That could help you avoid the Medicare high-income surcharge, which boosts your Part B and Part D premiums if your AGI is more than $85,000 if single or $170,000 if married filing jointly. Keeping the money out of your AGI could also make less of your Social Security benefits taxable.  It may also allow you to deduct more of your Medical expenses if you do itemize..